Overview

Our last Insight examined the risks of commencing a formal investigation without first determining whether one is warranted. Silva v. Royal Bank of Canada, 2026 ONSC 3841 ("Silva"), considers the other side of that coin: what can happen when an investigation may be warranted, but the process itself is flawed.

 

Together, these Insights reinforce a common principle: workplace investigations must be reasonable in the circumstances. Sometimes that means recognizing that a formal investigation should not proceed at all. At other times, as in Silva, it means ensuring that an investigation is conducted fairly, by a neutral investigator, and for a proper purpose.

 

The Facts

 

Silva arose in the context of a wrongful dismissal action. The focus of this Insight, however, is not on the dismissal itself, but on the Court's criticism of the employer's internal investigative processes. The facts surrounding the investigations are as follows:

 

In 2018, the Plaintiff’s employment was terminated for cause after an investigation into allegations that the Plaintiff forwarded confidential information to her personal email account, processed transactions before obtaining documentation from clients, and encouraged clients to backdate certain documents. There were also earlier investigations into the allegation that the Plaintiff’s trades had been processed by another team member, and allegations raised by the Plaintiff against her managers about bullying, harassment, and retaliation.

There were three groups involved in these investigations: an individual from employee relations who received the Plaintiff’s allegations of harassment and retaliation against her managers; an internal team responsible for investigating workplace misconduct, fraud, and policy breaches; and an internal compliance investigator who was engaged to assist with investigating possible misconduct with mutual fund trading activity.

 

Analysis

 

The employer in this case was found to have relied on investigations marred by unexplained and undocumented deviations in the process, unexplained gaps in the evidence, questions as to neutrality of the investigators (and a perception they were influenced by preconceived notions of what the findings ought to have been), and questions as to the investigators’ capabilities.

 

Between paragraphs 290 and 304, Silva offers several reminders for best practices:

 

• Document procedural decisions and the rationale behind them. Like may cases before it, Silva affirms that what constitutes an "adequate" or reasonable investigation is contextual. It also supports the suggestion that documenting and communicating the rationale for procedural decisions and addressing any gaps in the evidence can assist in defending the process. Put another way, investigators should be prepared to explain not only what they did, but why they made those procedural choices. For example, in the absence of any documented rationale for expanding the search of the Plaintiff's emails, the Court found that the review appeared aimed at "actively looking for something to use against [the Plaintiff]" rather than gathering evidence relevant to the allegations under investigation.

 

The Court was also critical of the investigators’ decisions not to interview some of the employer’s clients or provide the Plaintiff with an opportunity to obtain documentary evidence, including calendars, notes, and trading records, to respond to the allegations. Where an investigator does not pursue potentially relevant evidence, the rationale should be defensible and documented.

 

• Ensure the allegations, if true, would support a breach of an applicable policy, law, or professional obligation before proceeding down an investigative path. The Court was critical of the employer’s reliance on allegations relating to document dating practices where there was no applicable policy governing the conduct. As the Court observed: "In the absence of a policy governing the dating of missing documents, [the Plaintiff] cannot be found to have breached one."

 

• Assess the qualifications of the investigator. The Court was critical of the employer’s reliance on findings from the compliance investigators who, according to the Court, lacked compliance credentials, was unfamiliar with the relevant policies, had not completed mandatory training, and did not seem to have the skills necessary to appropriately characterize the alleged infractions when reporting to regulators. The analysis on this point also highlighted that legal characterizations matter, and that investigators must have the knowledge and experience necessary to apply them appropriately. I have encountered findings of "harassment," "discrimination," and "poisoned work environment" that were unsupported by sufficient factual findings in my practice. When organizations rely on those findings to determine their response, the consequences can be significant. In addition to exposing the organization to potential liability and negatively impacting the impacted individual, it can create confusion within the workplace about what conduct is actually prohibited and what standards employees are expected to meet.

 

• Carefully assess the relationship between investigators and those involved in the complaint. In Silva, the Court did not look favourably upon an employee relations advisor assisting management with formulating an organizational response to the Plaintiff’s alleged insubordination while also investigating the Plaintiff’s concerns that management’s conduct was harassing and retaliatory. While not a significant part of the Court’s analysis, it was also noted that there did not appear to have been any records suggesting that an investigation was conducted into the Plaintiff’s concerns, calling into question whether the individual from employee relations had already formed an opinion that her allegations did not need to be investigated.

 

• The scope of an investigation should not expand without a reasonable basis. Investigators should remain flexible when new evidence emerges. However, scope changes should be documented, supported by evidence, and communicated where fairness requires it.

 

• Investigations must be undertaken for a proper purpose and in good faith. This is often easier to achieve when responsibility for the process rests with an individual who has sufficient independence from those implicated in the allegations and from those with a vested interest in the outcome.

 

• Respondents and responding parties have the right to know the case against them and a meaningful opportunity to respond. While there is no hard-and-fast rule regarding the level of detail that must be disclosed or the timing of that disclosure, investigators should be able to explain any decision to withhold allegations, limit access to relevant information, or restrict a participant's ability to provide responsive evidence. In Silva, the Court did not provide specific guidance on this point but was critical of the investigator’s delivery of the allegations the morning of the interview with the Plaintiff, and of not providing her with an opportunity to provide documents and a fulsome written response before reaching their findings.

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This may look like providing a summary of the allegations in advance of an interview and accommodate reasonable requests for extensions to review materials, gather documents, consult legal counsel or union representatives, or provide a written response.

 

Takeaway

 

Silva highlights several circumstances where organizations should seriously consider whether an internal investigator is, and appears to be, neutral. The decision also highlights several warning signs for those conducting or overseeing investigations, including the following:

 

• Are you being directed to search for evidence that supports a particular theory or outcome? 

• Are you being asked to interview a respondent without a clearly defined scope or without clearly identifying the allegations being investigated?

• Are you being asked to proceed without providing the respondent notice of the allegations, and without a reasonable explanation for withholding that information?

• Are witnesses or documents being excluded from the process even though they may provide relevant or contradictory evidence, without a clear reason for doing so?

• Are you taking instructions from a complainant, respondent, manager, or other participant about how the investigation should proceed or what conclusions should be reached?

• Has the scope of the investigation been expanded or narrowed without a documented and reasonable explanation?

• Are you investigating allegations that, even if accepted as true, would not amount to a breach of a policy, professional obligation, or law?

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